Whistleblowers are supposed to be able to report illegal activity by their employers free from fears of retaliation. But what if complying with laws is part of your job as a manager or human resources professional? In that case the managers rule may apply and your protections as a whistleblower may be severely curtailed or non-existent.
What is the managers rule?
The managers rule is a creation of federal judges. It holds that employees whose job it is to comply with laws, typically managers and those employed in human resources, can’t be whistleblowers. The reasoning behind this rule is that allowing managers to be protected for reporting information that is part of their job would create too much litigation and make it harder to fire these employees.
Does the managers rule apply in Nebraska?
I am not sure, but I wouldn’t bet against the proposition. The 8th Circuit Court of Appeals, which Nebraska is part of, has applied the managers rule in federal whistleblower cases and in other state whistleblower laws decided under diversity jurisdiction. The 8th Circuit Court of Appeals recently remanded a whistleblower case under the Nebraska Fair Employment Practices Act to state court to determine whether the managers rule applies under Nebraska law.
However, Nebraska state courts tend to follow the 8th Circuit in interpreting fair employment laws, so it is very possible the Nebraska Court of Appeals or Nebraska Supreme Court would adopt the managers rule.
How does a whistleblower get around the managers rule?
I think there are two ways. One way is to show by an employee’s actual job duties that they aren’t covered by the rule. A California federal court did this recently in Kailikoke v. Palomar Community College. The Kailikoke court noted the manager rule wasn’t supported by the text of any statute and would exclude many workers from anti-retaliation laws.
Secondly, even if you concede the managers rule applies an employee who steps outside of their typical job duties to report employer misconduct is still protected by whistleblower laws. In Kelley v. Iowa State University, the Southern District of Iowa, found that a Title IX compliance officer had stepped outside of her role in refusing to implement policies ordered by the University. The court also found that she stepped outside of her role because the school undermined her position.
Employment at-will and the managers rule
The Kailikoke court is right holding that the managers rule isn’t supported by statute. But the managers rule is supported by the employment at-will doctrine. The employment at-will doctrine is a judge-made creation that gives employers almost free reign to fire employees. Ronald Standler’s article on the history of the doctrine is a must read.
Of course anti-discrimination and retaliation statutes limit the powers of employers to fire employees. But in order to uphold the employment at-will doctrine, courts create other rules like the managers rule to minimize the impacts of these laws.